Russian food retailer X5 Retail (X5) has reached an agreement with Luxembourg-based O’KEY to acquire its supermarkets business currently operating under the O’KEY brand.

Financial terms of the transaction have not been disclosed by either company.

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Russia’s Federal Antimonopoly Service (FAS) is reported to have approved this deal.

O’KEY CEO Miodrag Borojević said: “We are pleased to have reached the agreement with X5 Retail Group to sell our supermarket business.

“While we maintain a focus on organic growth for X5, we miss no opportunities to acquire promising locations in strategically important regions.”

“The renewed company structure based on this sale will allow us to focus on the core strategic priorities of the business – efficiency improvement at compact city hypermarkets and accelerating the expansion of our discounters.”

As per the deal, X5 will acquire O’KEY’s 32 supermarkets, including 18 in St Petersburg, four in Moscow, two in Volgograd, and one each in the Moscow and Leningrad regions, Astrakhan, Voronezh, Lipetsk, Togliatti, Krasnodar and Novocherkassk.

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In addition to the supermarkets, X5 will also acquire the real estate (supermarket buildings) for 14 stores, 13 in St Petersburg and one in Moscow.

The supermarkets will be integrated into the Perekrestok chain in the near future.

X5 Retail Group CEO Igor Shekhterman said: “This transaction is fully in line with our strategy of strengthening Perekrestok’s position as the leading supermarket chain in Russia.

“While we maintain a focus on organic growth for X5, we miss no opportunities to acquire promising locations in strategically important regions.”

X5 will also open its 12,000th store at 27 Tretya Pyatiletka Street, Novodvinsk, Arkhangelsk region.